Finally! Today is the day, your significant other is moving in with you! A dream that finally came true and you both are dancing happily. But then, the first rent bill comes, and you are stuck. How should I handle or now how do WE handle it? Back in the day, typically couples were married and combined all aspects of their lives together. All was now family property. Times have changed, couples are moving in together before marriage without any legal binding and it leaves them wondering, how do we handle our finances? Should you and your significant other consolidate your finances or maintain your own finances independently?
How many couples have their finances shared, separated, or some of both? Millennials that live together are more likely to keep their finances separated than any other group. There are many advantages to keeping them separate. One may be in a situation where they hold debt. With debt in their shadows, it is easy to understand why they may feel guilty to burden the other with their problems. Or you may have been in situations where money was abused in the past, keeping separate accounts can help protect you if you get caught in a serious problem. But mainly, most people prefer keeping their finances separate to keep their independence. We live our lives not having someone telling us what we can and can not buy, so if we do not combine finances, we will not need to fight about it.
But that is not the case. There are still many attractive reasons why couples decide to combine their finances.
When finances are combined, you can work together to get rid of debt reduction quickly. Having both accounts combined makes it easier to make large purchases like home so banks can access your different portfolios. Shared finances also help each other if one unexpectedly loses their job or an accident or even start a family. Having someone to back you up financially is a game-changer for many couples. More transparency leads to a more healthy and long-lasting relationship. Having someone to keep you accountable helps lead to better management of both relationship and financial quality. Some couples combine a joint proportion of what they earn into a joint account or bill parsing where they choose who pays for what.
There are many different ways couples can combine finances without fully committing all their finances. Each relationship is unique so no one way will work for all. If you decide to combine and have individual finances, it helps lead to healthy levels of trust. The finances help you become a better couple while protecting your own financial independence and freedoms.
Lucas Zhang was a Finance major at Ohio State University. He writes about finance, mortgages, and technology for Irish Mortgage Brokers.